BILL NUMBER: SB 2195	CHAPTERED  09/30/00

	CHAPTER   1086
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 30, 2000
	PASSED THE ASSEMBLY   AUGUST 25, 2000
	PASSED THE SENATE   MAY 31, 2000
	AMENDED IN SENATE   APRIL 25, 2000
	AMENDED IN SENATE   APRIL 5, 2000

INTRODUCED BY   Senator Soto

                        MARCH 16, 2000

   An act to amend and repeal Section 205.5 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 2195, Soto.  Property taxation:  veterans' exemption.
   Existing property tax law provides, pursuant to the authorization
of the California Constitution, for the exemption from property
taxation of the home of a disabled veteran, or a veteran's spouse in
the case in which the veteran has, as a result of a service-connected
disease or injury, died while on active duty in military service.
Existing property tax law specifies an exemption amount of $40,000
and increases that amount to $100,000 in the case in which the
disabled veteran is completely disabled.  Existing law increases
these amounts to $60,000 and $150,000, respectively, if the exemption
claimant's income does not exceed an amount stated in a specified
statute.  Existing law also repeals the higher exemption amounts with
regard to totally disabled veterans as of January 1, 2001.
   This bill would remove this repeal date.
   Section 2229 of the Revenue and Taxation Code requires the
Legislature to reimburse local agencies annually for certain property
tax revenues lost as a result of any exemption or classification of
property for purposes of ad valorem property taxation.
   This bill would provide that, notwithstanding Section 2229 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for property tax revenues lost by
them pursuant to the bill.
   The bill would incorporate changes to Section 205.5 of the Revenue
and Taxation Code made by SB 1362 to become operative only if both
bills are chaptered and this bill is chaptered last.
   This bill would take effect immediately as a tax levy.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 205.5 of the Revenue and Taxation Code, as
amended by Section 16.5 of Chapter 1087 of the Statutes of 1996, is
amended to read:
   205.5.  (a) Property that is owned by, and that constitutes the
principal place of residence of, a veteran is exempted from taxation
on that part of the full value of the residence that does not exceed
forty thousand dollars ($40,000), if the veteran is blind in both
eyes or has lost the use of two or more limbs as a result of injury
or disease incurred in military service or that does not exceed one
hundred thousand dollars ($100,000), if the veteran is totally
disabled as a result of injury or disease incurred in military
service.  The forty-thousand-dollar ($40,000) exemption shall be
sixty thousand dollars ($60,000), and the one-hundred-thousand-dollar
($100,000) exemption shall be one hundred fifty thousand dollars
($150,000), in the case of an eligible veteran whose household income
as defined in Section 20504 does not exceed the amounts specified in
Section 20585.
   (b) For purposes of this section, "veteran" means either of the
following:
   (1) A veteran as specified in subdivision (o) of Section 3 of
Article XIII of the Constitution without regard to any limitation
contained therein on the value of property owned by the veteran or
the veteran's spouse.
   (2) Any person who would qualify as a veteran pursuant to
paragraph (1) except that he or she has, as a result of a
service-connected injury or disease died while on active duty in
military service.  The United States Department of Veterans Affairs
shall determine whether an injury or disease is service connected.
   (c) (1) Property that is owned by, and that constitutes the
principal place of residence of, the unmarried surviving spouse of a
veteran is exempt from taxation on that part of the full value of the
residence that does not exceed forty thousand dollars ($40,000), in
the case of a veteran who was blind in both eyes or had lost the use
of two or more limbs, or one hundred thousand dollars ($100,000), in
the case of a veteran who was totally disabled provided that either
of the following conditions is met:
   (A) The deceased veteran during his or her lifetime qualified in
all respects for the exemption or would have qualified for the
exemption under the laws effective on January 1, 1977, except that
the veteran died prior to January 1, 1977.
   (B) The veteran died from a disease that was service connected as
determined by the United States Department of Veterans Affairs.
   The forty-thousand-dollar ($40,000) exemption shall be sixty
thousand dollars ($60,000), and the one-hundred-thousand-dollar
($100,000) exemption shall be one hundred fifty thousand dollars
($150,000), in the case of an eligible unmarried surviving spouse
whose household income as specified in Section 20504 does not exceed
the amounts specified in Section 20585.
   (2) Commencing with the 1994-95 fiscal year, property that is
owned by, and that constitutes the principal place of residence of,
the unmarried surviving spouse of a veteran as described in paragraph
(2) of subdivision (b) is exempt from taxation on that part of the
full value of the residence that does not exceed one hundred thousand
dollars ($100,000).  The one-hundred-thousand-dollar ($100,000)
exemption shall be one hundred fifty thousand dollars ($150,000), in
the case of an eligible unmarried surviving spouse whose household
income as specified in Section 20504 does not exceed the amounts
specified in Section 20585.
   (d) As used in this section, "property that is owned by a veteran"
or "property that is owned by the veteran's unmarried surviving
spouse" includes all of the following:
   (1) Property owned by the veteran with the veteran's spouse as a
joint tenancy, tenancy in common, or as community property.
   (2) Property owned by the veteran or the veteran's spouse as
separate property.
   (3) Property owned with one or more other persons to the extent of
the interest owned by the veteran, the veteran's spouse, or both the
veteran and the veteran's spouse.
   (4) Property owned by the veteran's unmarried surviving spouse
with one or more other persons to the extent of the interest owned by
the veteran's unmarried surviving spouse.
   (5) So much of the property of a corporation as constitutes the
principal place of residence of a veteran or a veteran's unmarried
surviving spouse when the veteran, or the veteran's spouse, or the
veteran's unmarried surviving spouse is a shareholder of the
corporation and the rights of shareholding entitle one to the
possession of property, legal title to which is owned by the
corporation.  The exemption provided by this paragraph shall be shown
on the local roll and shall reduce the full value of the corporate
property.  Notwithstanding any provision of law or articles of
incorporation or bylaws of a corporation described in this paragraph,
any reduction of property taxes paid by the corporation shall
reflect an equal reduction in any charges by the corporation to the
person who, by reason of qualifying for the exemption, made possible
the reduction for the corporation.
   (e) For purposes of this section, being blind in both eyes means
having a visual acuity of 5/200 or less; losing the use of a limb
means that the limb has been amputated or its use has been lost by
reason of ankylosis, progressive muscular dystrophies, or paralysis;
and being totally disabled means that the United States Department of
Veterans Affairs or the military service from which the veteran was
discharged has rated the disability at 100 percent or has rated the
disability compensation at 100 percent by reason of being unable to
secure or follow a substantially gainful occupation.
   (f) An exemption granted to a claimant in accordance with the
provisions of this section shall be in lieu of the veteran's
exemption provided by subdivisions (o), (p), (q), and (r) of Section
3 of Article XIII of the Constitution and any other real property tax
exemption to which the claimant may be entitled.  No other real
property tax exemption may be granted to any other person with
respect to the same residence for which an exemption has been granted
under the provisions of this section; provided, that if two or more
veterans qualified pursuant to this section coown a property in which
they reside, each is entitled to the exemption to the extent of his
or her interest.
  SEC. 1.5.  Section 205.5 of the Revenue and Taxation Code, as
amended by Section 16.5 of Chapter 1087 of the Statutes of 1996, is
amended to read:
   205.5.  (a) Property that is owned by, and that constitutes the
principal place of residence of, a veteran is exempted from taxation
on that part of the full value of the residence that does not exceed
one hundred thousand dollars ($100,000), if the veteran is blind in
both eyes, has lost the use of two or more limbs, or if the veteran
is totally disabled as a result of injury or disease incurred in
military service.  The one-hundred-thousand-dollar ($100,000)
exemption shall be one hundred fifty thousand dollars ($150,000), in
the case of an eligible veteran whose household income does not
exceed the amount of forty thousand dollars ($40,000), as adjusted
for the relevant assessment year as provided in subdivision (g).
   (b) For purposes of this section, "veteran" means either of the
following:
   (1) A veteran as specified in subdivision (o) of Section 3 of
Article XIII of the Constitution without regard to any limitation
contained therein on the value of property owned by the veteran or
the veteran's spouse.
   (2) Any person who would qualify as a veteran pursuant to
paragraph (1) except that he or she has, as a result of a
service-connected injury or disease died while on active duty in
military service.  The United States Department of Veterans Affairs
shall determine whether an injury or disease is service connected.
   (c) (1) Property that is owned by, and that constitutes the
principal place of residence of, the unmarried surviving spouse of a
veteran is exempt from taxation on that part of the full value of the
residence that does not exceed one hundred thousand dollars
($100,000), in the case of a veteran who was blind in both eyes, had
lost the use of two or more limbs, or was totally disabled provided
that either of the following conditions is met:
   (A) The deceased veteran during his or her lifetime qualified in
all respects for the exemption or would have qualified for the
exemption under the laws effective on January 1, 1977, except that
the veteran died prior to January 1, 1977.
   (B) The veteran died from a disease that was service connected as
determined by the United States Department of Veterans Affairs.
   The one-hundred-thousand-dollar ($100,000) exemption shall be one
hundred fifty thousand dollars ($150,000), in the case of an eligible
unmarried surviving spouse whose household income does not exceed
the amount of forty thousand dollars ($40,000), as adjusted for the
relevant assessment year as provided in subdivision (g).
   (2) Commencing with the 1994-95 fiscal year, property that is
owned by, and that constitutes the principal place of residence of,
the unmarried surviving spouse of a veteran as described in paragraph
(2) of subdivision (b) is exempt from taxation on that part of the
full value of the residence that does not exceed one hundred thousand
dollars ($100,000).  The one-hundred-thousand-dollar ($100,000)
exemption shall be one hundred fifty thousand dollars ($150,000), in
the case of an eligible unmarried surviving spouse whose household
income does not exceed the amount of forty thousand dollars
($40,000), as adjusted for the relevant assessment year as provided
in subdivision (g).
   (d) As used in this section, "property that is owned by a veteran"
or "property that is owned by the veteran's unmarried surviving
spouse" includes all of the following:
   (1) Property owned by the veteran with the veteran's spouse as a
joint tenancy, tenancy in common, or as community property.
   (2) Property owned by the veteran or the veteran's spouse as
separate property.
   (3) Property owned with one or more other persons to the extent of
the interest owned by the veteran, the veteran's spouse, or both the
veteran and the veteran's spouse.
   (4) Property owned by the veteran's unmarried surviving spouse
with one or more other persons to the extent of the interest owned by
the veteran's unmarried surviving spouse.
   (5) So much of the property of a corporation as constitutes the
principal place of residence of a veteran or a veteran's unmarried
surviving spouse when the veteran, or the veteran's spouse, or the
veteran's unmarried surviving spouse is a shareholder of the
corporation and the rights of shareholding entitle one to the
possession of property, legal title to which is owned by the
corporation.  The exemption provided by this paragraph shall be shown
on the local roll and shall reduce the full value of the corporate
property.  Notwithstanding any provision of law or articles of
incorporation or bylaws of a corporation described in this paragraph,
any reduction of property taxes paid by the corporation shall
reflect an equal reduction in any charges by the corporation to the
person who, by reason of qualifying for the exemption, made possible
the reduction for the corporation.
   (e) For purposes of this section, being blind in both eyes means
having a visual acuity of 5/200 or less, or concentric contraction of
the visual field to 5 degrees or less; losing the use of a limb
means that the limb has been amputated or its use has been lost by
reason of ankylosis, progressive muscular dystrophies, or paralysis;
and being totally disabled means that the United States Department of
Veterans Affairs or the military service from which the veteran was
discharged has rated the disability at 100 percent or has rated the
disability compensation at 100 percent by reason of being unable to
secure or follow a substantially gainful occupation.
   (f) An exemption granted to a claimant in accordance with the
provisions of this section shall be in lieu of the veteran's
exemption provided by subdivisions (o), (p), (q), and (r) of Section
3 of Article XIII of the Constitution and any other real property tax
exemption to which the claimant may be entitled.  No other real
property tax exemption may be granted to any other person with
respect to the same residence for which an exemption has been granted
under the provisions of this section; provided, that if two or more
veterans qualified pursuant to this section coown a property in which
they reside, each is entitled to the exemption to the extent of his
or her interest.
   (g) To determine, for taxes that attach as a lien in 2002 and in
each calendar year thereafter, whether the lower or higher exemption
amount governs the amount of an exemption under this section, each
household income amount applied under subdivision (a) or (c) for
taxes that attached as a lien during the immediately preceding
calendar year shall be adjusted by an inflation factor that is the
percentage change, rounded to the nearest one-thousandth of 1
percent, from October of the prior fiscal year to October of the
current fiscal year, in the California Consumer Price Index for all
items, as determined by the California Department of Industrial
Relations.
  SEC. 2.  Section 205.5 of the Revenue and Taxation Code, as amended
by Section 17 of Chapter 1087 of the Statutes of 1996, is repealed.

  SEC. 3.  Notwithstanding Section 2229 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any property tax revenues lost by it
pursuant to this act.
  SEC. 4.  Section 1.5 of this bill incorporates amendments to
Section 205.5 of the Revenue and Taxation code proposed by both this
bill and Senate Bill 1362.  It shall only become operative if (1)
both bills are enacted and become effective on or before January 1,
2001, (2) each bill amends Section 205.5 of the Revenue and Taxation
Code, and (3) this bill is enacted after Senate Bill 1362, in which
case Section 1 of this bill shall not become operative.
  SEC. 5.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
